BUS100

Business Skills and Management

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SAMPLE Class Test

CT01

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SAMPLE CLASS TEST

This sample class test only consists of one question. But in the actual class test, there will be two
questions with similar business scenarios.

The sample paper aims to give you an idea of what to expect for the test. It is purely for illustration
purposes. In addition, the actual test may be of different difficulty levels. We provide the answers at
the end as a reference. Don’t ask for the EXCEL solution. It would be best if you tried it out yourself.

You are NOT required to do the documentation for this test; it doesn't need to fit into an A4 page.
Just answer the question, write your answer and label all parts clearly.

It is an individual test; you should work on it yourself. However, plagiarism is a severe offense; anyone
found cheating will get a ZERO for the test.

This is an open-book test and covers all study units. You may use Excel or other spreadsheet
applications on your computer. You are, however, not allowed to communicate with others.

Read the question carefully before an attempt. Review all its parts and questions given first before
doing anything for each question.

Using your computer, construct the required spreadsheet models, clearly label all the parts, and
provide answers to the questions asked.
Question 1 (50 marks)

The company ABC Pte. Ltd sells computers and accessories. The company pays the staff a basic salary
of $2500 a month. On top of it, the staff also earn commission based on their sales. Table 1 below is
the sales commission table. The staff will make a tiered based commission, and their status will be
based on the total sale for the month.

Table 1: Sale commission table.

Sale commission table Commission rate Status

$10000 - $29999 1.00% Bronze
$30000 - $79999 1.50% Silver
$80000 - $99999 2.00% Gold
At least $100000 3.00% Platinum

Table 2: CPF contribution table

Age range By employer (% of wage) By Employee (% of wage)

55 and below 17% 20%
Above 55 to 60 14% 14%
Above 60 to 65 10% 8.50%

Develop a spreadsheet model to help the company to generate the staff pay. For a given staff name,
age, and sale input, the model should look up the commission table to get the rate, staff commission,
and status. The total earnings should be computed, which is the sum of basic pay and commission.
Refer to table 2 for CPF contribution. Based on the employee's age, the company or employer also
needs to contribute % of wage (which includes basic pay + commission) based on the rate given in
Table 2 above (in column 2). This CPF contribution will be auto-credited to the staff CPF account. Each
staff is also subjected to an employee CPF contribution (Table 2, column 3). At the end of the month,
the staff will have a net pay which is total earnings minus the CPF contribution by employee.

For example, if the staff is 30 years old, the sale amount is 15000, and the commission rate based on
Table 1 is 1% of 15000. Thus the commission earned is $150 and the total earnings for the month is
basic salary plus the commission which is $2650, net pay after deducing CPF contribution by employee
is $2120. The person's status is Bronze. The employer also contributes $450.50.

Use the template given below as a reference, and revise the commission table so that when you input
Age and Sale in Cells (C10 and C11), employee status, and commission rate, thus commission earned
can be computed automatically. In the mean time, you would also need to revise CPF contribution
table for the look-up table to work. Using employee age as input, retrieve the employer contribution
rate (%) and the employee contribution rate (%). Then, use total earnings (as wage) to compute the
Employer CPF contribution in Cell C16 and Employee CPF contribution in Cell C17. Finally, calculate
the net pay ($) in Cell C18.

It would help if you did not deviate from the template given. You may need to ensure that cell
references in your formula are properly done to allow them to be copied over to the rest of the table.
Complete the spreadsheet model below and answer the following questions.
a. Using the spreadsheet model, if Amy Tay, who is 28 years old, has $55,000 sales for the month,
what is her employee status? And compute the total earnings ($) and net pay ($). (15 marks)

b. What should be the sale input if Amy Tay wants to bring home (net pay) is $3000? Explain how
you get the answer. (5 marks)

c. Table 3 below shows the five sale persons that the company hired. Use the template in the table
from rows 21 to 25. Each row represents one staff record. Tabulate each staff status and
commission earned, total earnings (basic + commission), employer CPF contribution, employee CPF
contribution, and net pay for each staff. Compute the total salary expenses by the company at the
end of the month. Total salary expenses should include all the basic pay, commission, and employer
CPF contribution. (15 marks)

Table 3: Employees list and sale input

Name Age Sale input

Amy Tay 28 $ 55,000.00
Bobbie Cheng 56 $ 87,000.00
Catherine Goh 60 $ 23,000.00
Willian Min 43 $ 150,000.00
Zachery Tan 67 $ 35,000.00
d. Due to an increase in the inflation rate, the company would like to adjust the commission rate but
keep the basic salary unchanged. To work on the model, you may assume that the sale amount per
staff remains the same. The company wants to keep the commission rate should be between 1%
to 5%. All the staff expects their total earnings to increase by at least 5% for the same sale input to
beat inflation. State the solver objective, and constraints and explain how you solve the problem.
What is the best commission rate the company should pay to the staff? What is the new total salary
expense for the company? (15 marks)

---------------------------------------------------- END OF PRACTICE PAPER ----------------------------------------------

Use this sample test question as practice for the class test. We will provide no EXCEL solution.
Instead, refer to the following answer as a guide.

Answer:
Part a:

Ans: Amy Tan’s status is Silver. Total earnings is $3325, and Net pay is $2660.

Part b:

Ans: Amy needs to make at least $80,000 sale to have a net pay of at least $3000. You can use Goal-
seek. Set net pay in Cell C18 to value 3000 by changing the sale input in C11.

Part c:

Ans:

Name Age Sale input Net Pay ($)

$ 3,325.00
Amy Tay 28 $ 55,000.00
$ 4,240.00
Bobbie Cheng 56 $ 87,000.00
$ 2,730.00
Catherine Goh 60 $ 23,000.00
$ 7,000.00
Willian Min 43 $ 150,000.00
$ 3,025.00
Zachery Tan 67 $ 35,000.00

The total salary expense is $23244.35.

Part d:

Using Solver: the objective is to minimise the total salary expense by the company

By changing the commission rate

Subject to constraints:

1. The new rate is between 1% and 5%

2. % increase in total earrings for each staff >= 5%
3. If the person sells more, they should get a higher commission rate.
 New earnings Old earnings
Name % increase
$ 3,562.68 $ 3,325.00
Amy Tay 7% >=5%
$ 4,452.00 $ 4,240.00
Bobbie Cheng 5% >=5%
$ 2,866.50 $ 2,730.00
Catherine Goh 5% >=5%
$ 7,350.00 $ 7,000.00
Willian Min 5% >=5%
$ 3,176.25 $ 3,025.00
Zachery Tan 5% >=5%

Best Commission rate

1.59%
1.93%
2.24%
3.23%

New salary expense $ 24,490.14

Note: new salary expense is not the sum of new earnings alone. The company also needs to pay for
Employer CPF contribution. Thus, it should be the sum of new earnings and employer CPF
contribution.